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   Vol. 18 No. 18
Tuesday March 12, 2019

Goyal Departs Jet
Jim Hogan, Naresh Goyal and Jen-Marc Janaillac

Jet Airways’ Chairman Naresh Goyal stepped down on March 1, ending 25 years with a whimper; aviation pundits in India were not surprised.
Fliers will agree that not too long ago, Jet had set the gold standard for service and excellence.
But over the last few years, its quarterly losses had grown, as had its woes.
In just ten years, the company with close to 50 percent market share went down to less than 15.

Grounded Fleet

     In early March, for example, 47 of Jet’s planes were on the ground. In addition to that, 9 ATRs and 36 B737 series aircraft, which included all its B737 MAX8 planes, were grounded at various locations across the country.
     Jet also just stopped flying to a number of destinations within the country.

Verdict On Goyal

     Part of the reason for the airline running to the ground was Goyal’s manner.
     He is famous for his temper tantrums and well known for taking pot shots at his senior staff anytime, anywhere.
     Witness the number of top management officials who quit the carrier.
     His wife Anita Goyal, who is also on the board was in charge of the commercial department and ran it like her own empire.
     It was often said that nothing moved in the department without a nod from the ‘Madam’.

King of Networking

     But these quirks were more than made up by Naresh Goyal’s fantastic ability to network with the high and mighty in the world of aviation, as well as in the corridors of power in Delhi.
     Naresh was so good at his networking that he made sure Jet had no major competitor apart from Air India.
     Air India, in fact, was told to fall in line through directives from the civil aviation ministry that was influenced by Goyal.
     It is well known that Goyal’s lobbying with Ministers and politicians put the screws to moves by the Tata-Singapore Airline JV in the mid-Nineties (he apparently convinced them that the JV was anti-national).
     For their part, the Tatas did not take it too kindly and when Goyal went with a begging bowl asking for help sometime ago, the Tatas simply said, ‘No, thank you.’

Naresh Goyal and Geoffrey ArendNo One Cares

     Now, no one listens to Goyal in the corridors of power.
     So, his appeal to the government for help, and mind you this is election time, has gone unheard.
     The government would not like a failed Jet Airways; it would send the wrong signals to the people on the eve of a countrywide election. The politicians here have made it clear to the primary lenders, the banks, to save Jet Airways but not Naresh Goyal.
     So, where does that leave Jet Airways?
     Lenders led by the State Bank of India own 50 percent equity in the airline through 114 million new shares that were issued under the new regulations of the Reserve Bank of India (RBI) for companies which have negative net worth.
     Now, there is a view that the airline will survive to see another day, perhaps in another form but in the same name.

Looking For New Partners?

     If the market and aviation watchers are to be believed, the main bank, State Bank of India’s scenario for Jet will be coaxing Etihad, a minority shareholder in Jet Airways (it has 24 percent stake in the airline and 50.1 per cent in its frequent flier program, JetPrivilege), to provide new leadership.
     Once the airline stabilizes, the search will start for a buyer.

Going Bankrupt

     Another option is to let Jet go bankrupt.
     If that happens, the Tatas could buy Jet Airways. Naresh Goyal, who still holds a sizable percentage of Jet Airways stock, obviously would not favor that move or like it at all.
     Infusion of finances along with a leaner cost structure could save the airline.
     All this upheaval is playing out as Jet Airways marks its 25th year, celebrating with a “Looking back, Soaring ahead” attempt at branding.
     No doubt 2019 will be a year Naresh Goyal will look back at for a long, long time.
Tirthankar Ghosh

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